Thursday, May 21, 2015

Unicorns!

CSAG has saved the future prosperity of the great city of San Diego by assuring that the Chargers will play their games here for the next thirty years in a new $1.1 billion stadium that will be built without the imposition of any new taxes on the citizens of our city because it will be paid for by unicorns and mermaids. Most cities have to rely only on unicorns, be we have the advantage of being right on the Pacific Ocean, so we have mermaids too.

Actually, the Citizens Stadium Advisory Group plan (pdf) includes more than a dozen putatively realistic funding sources, one or two of which might actually fly, in which case the stadium would be about 10% funded in the real world that you and I live in. CSAG’s funding includes:

$200 million from the NFL, which has not been approached on the subject and has not agreed to provide any money for any stadium in any city. They have said that they “will study CSAG’s proposal carefully.”

$300 million from the Chargers, who said twelve years ago that they might provide $200 million toward a new stadium, but who have not been approached recently as to paying any part of a new stadium. They also have said that they “will study CSAG’s proposal carefully.”  The Charger contribution is not really $300 million, though, as we will see later.

$121 million from the “City Stadium Fund”  which sounds like an existing pile of money but is nothing of the sort. In fine print it says “$70 million per year for 30 years,”  which is actually $210 million and is the amount of the general obligation bonds which the city will sell to provide $121 million toward construction of the stadium. The other $89 million is, of course, interest on the bonds, but the whole $210 million is money out of the taxpayers’ pockets. For some reason, that $210 million will come out of the pockets of taxpayers without any new taxes being imposed, which is a pretty neat trick.

$121 million from the “County Stadium Fund,”  which means that CSAG is an ecumenical taxpayer abuser, willing to screw county taxpayers as well as city ones.

$60 million from “personal seat license”  (PSL) sales. They actually plan to sell $120 million of these PSLs, 50% of which will be returned to the Chargers to reimburse them for what they contributed to the construction, which why it was pointed out that the Chargers’ contribution is not $300 million, but is actually $240 million. This is a complicated plan; try to keep up.

Selling $120 million in PSLs is going to be a neat trick in a market which cannot reliably fill a 40,000 seat stadium, which holds the league record in television blackouts and is in the only city ever to have a Monday Night game blacked out locally. Some of the PSLs will be bought by voyeurs who will be attending games to watch the mermaids who bought the other PSLs.

$216.2 million in rent from the Chargers, San Diego State and bowl games. If that goes to pay for the construction, what is going to be used to cover the operating cost? Nonetheless, probably one source of funding that is legitimate.

$225 million from the sale of part of the Mission Valley site to developers, at $3 million per acre. That might happen. And I might win the Boston Marathon too, but I don’t think that San Diego should be selling any bonds against that eventuality.

$110.7 million from ticket and parking surcharges. No tax increases, but going to games is going to cost quite a bit more. This does have the advantage of placing the burden on those who benefit from the Chargers, and not on the general taxpayers.

$50 million form “Additional funding sources stadium is expected to generate.”  This is otherwise, and more accurately, stated as “We don’t know what that might be but we needed another $50 million in the plan.”

Don’t get me wrong, I am a fan of the Chargers and I want them to stay in town. But if the population is resisting the idea of building a $500 million stadium I just cannot believe that the solution is to come up with a $1.1 billion alternative. Someone has just flat lost their collective mind, here.

1 comment:

bruce said...

I read the report. I think my eyes were glazed over by the end of it. Comments are based mostly on Jayhawk's post.

I always thought the NFL made money for the NFL, not to give it away, especially for local stadiums, which are the responsibility of team owners (really rich guys) and municipalities. And how much money does the Chargers have and will generate in order to fork over for a new stadium? Remember they have costs too.

City and county "funds", which are thinly disguised bonds, which are not taxes, they are bonds! Like checks are not "money" they are "bearer instruments", or an insurance policy is a "financial product". Fees are not taxes. Assessments are not taxes.

Some of the listed rent amounts don't add up, unless I'm missing something. That's assuming those entities will agree to that. Surcharges and parking fees and so on means a lot of money to see a ball game. Gotta have a lot of die hard fans for all that, do you have them now? PSL's are a favored way for all sports franchses to rake in money, which is great for corporations and uber-rich people, but what about us regular folk?

"Additional funding sources" is a grab bag of stuff, a lot of it a marketing/PR stroke of genius, or maybe they just had a stroke. Or smoking something. I'm not saying any of that would or would not work, but it sounds like they are selling or renting everything they can lay their hands or someone's eyeballs on.

One thought I had is that a lot of the revenue sources listed are ongoing streams, not up-front /one time only monies. This seems to me to be more suited to ongoing operating costs, maintenance, personnel, etc. Unless they are gong to try to sell bonds on these streams in order to raise construction money. Then what happens to this money if it fails to live up to expectations (ie, predictions)? And what about operating costs? That was barely mentioned.

The plan in Carson sounds good, but I see a lot of obstacles. The plan in Inglewood sounds better, especially since it's fully paid for by the rich dude moving the Rams. But - as always - I'll believe it when I see it.

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